By Ejiofor Alike

The plummeting prices of crude oil have taken a toll on the price of Liquefied Natural Gas (LNG) in the international market as the latter also slumped by over 50 per cent due to the correlation between the prices of the two products, THISDAY has learnt.

THISDAY gathered that LNG buyers in Europe, who use to pay $9 per unit of LNG, now pay $5 or $6 per unit, after the price of crude dropped from $115 per barrel in June 2014 to less than $50 per barrel in May 2016.



It was also learnt that Asian LNG buyers that used to pay $15 per unit of LNG, now pay about $6 per unit because of the corresponding drop in the prices of crude oil.

The Managing Director and Chief Executive Officer of Nigeria LNG Limited, Mr. Babs Omotowa, who confirmed the drop in LNG price, told THISDAY in an exclusive interview that the gas prices were affected by the global slump in oil prices because gas prices were linked to oil price, as both were energy sources.

Omotowa revealed that there was a 70 per cent correlation in the price of oil and the price of gas.

“So, when you look at NLNG’s Facts and Figures publication, which we released a few weeks ago, even the revenue of 2015 was 40 per cent lower than 2014 and even this year, our revenue will even be lower than in 2015. So, the gas market has seen a big drop. This year, for example, in Asia where we use to get up to $15 per unit of gas, we get today about $5-$6. In Europe where we used to get $9 per unit, we get about $5 -$6. So, the price of gas has also come down; revenues have dropped,” he explained.

“But we are working very hard to make sure that we still remain profitable. We are working hard to make sure we find new opportunity areas; higher value markets and we are also making sure that we drive operational efficiencies and we are reducing our costs so that we can still be profitable and continue to return good revenues to the coffers of the government and our shareholders,” he added.

Omotowa added that based on the support of President Muhammadu Buhari and the Minister of State for Petroleum, Dr. Ibe Kachikwu, NLNG’s shareholders hope to take the Final Investment Decision (FID) for the Train 7 before the end of the tenure of this administration on May 29, 2019.

“In 2008, we were ready to take the Final Investment Decision (FID). But due to some discussions at that time around other priorities, especially from the federal government side, the FID could not be taken at that time. What that has meant is that overtime, the contracts that should have been put in place – the bids have all elapsed. So, we have to go back to the starting block,” he said.

He said the shareholders were currently on ‘the basis for design stage’ of the project, adding that the next stage would be the Front End Engineering Design (FEED) before the shareholders would move into tendering for the activities- engineering procurement and construction (EPC).

“That will enable us take the FID. We are working hard because we have so much support now from the government. Both the President and the Minister of State for Petroleum are very supportive and we want to take FID during this administration. Having said that, the current low price of oil, of course, makes it more challenging. So, we also have to work at reducing the cost of the project. We are very determined and we are making all the progress now to take this FID during this administration,” Omotowa explained.

He debunked insinuations that Nigeria does not have sufficient gas to meet the needs of LNG projects, saying that the country has much more than enough gas as one of the top 10 countries in the world with gas reserves.

According to him, Nigeria has over 180 trillion cubic feet of proven gas reserves, while only 30 trillion cubic feet would be required by NLNG for 25 years.

“It is known by analysis that Nigeria has about 600 trillion cubic feet of gas. Just to give you an idea; out of the 180 TCF of gas that we have, the whole requirement of NLNG for 25 years will be less than 30 TCF. So, it is small when you think of 30 out of 180 or 30 out of 600; it is not much. So, Nigeria has more than enough gas for export; for domestic power and for petrochemical,” he added.

http://www.thisdaylive.com/index.php/2016/05/30/plummeting-oil-prices-lng-price-slumps-by-over-50/

is it that buhari is synonymous to bad luck?

We shall conquer.

Welcome to change.

We brought this upon ourselves. Wen we say we prefer evil to good. This is the result.

And to be frank, this is just d beginning. People that are saying things will get better under a Deceitful, Devilish Party APC. Are not conscious deep thinkers spiritually. Wat we facing now is beyond d physical and it's more of spiritual.

Wen u use lies, propaganda, defamation to remove a man that had a good mind for this country (GEJ).they told us GEJ is the most corrupt leader ever to rule Nigeria(someone that did not allocate one oil bloc to himself); but abacha, obj, ibb, danjuma,indimi, guwon, muritala, shagari, bayero, otedola, alakija, ameachi etc I laugh. That is the highest deceit I av heard And u think u will florish. It's not possible. God does not sleep nor slumber. He is aware of the happenings of this country.

So my brothers and sisters there is little or nothing u can do about it. It's beyond ur power and APC. It's only God that can salvage d situation.

Don't be surprise of another upsurge of prices of commodities soon again.

I know people are already feeling d hardship. But read Judges in d bible. And u will understand wat is going on in Nigeria.

Problem everywhere

No hope for Nigeria

Somebody will read this and still blame buhari for the falling oil prices

bondingman:
is it that buhari is synonymous to bad luck?

Presidiot mumumad buhari with his1983 bad luck is at it again

sholexy21:
sai change, sai Baba

Pavarottii:
Welcome to change.
We brought this upon ourselves. Wen we say we prefer evil to good. This is the result.
And to be frank, this is just d beginning. People that are saying things will get better under a Deceitful, Devilish Party APC. Are not conscious deep thinkers spiritually. Wat we facing now is beyond d physical and it's more of spiritual.
Wen u use lies, propaganda, defamation to remove a man that had a good mind for this country (GEJ).they told us GEJ is the most corrupt leader ever to rule Nigeria(someone that did not allocate one oil bloc to himself); but abacha, obj, ibb, danjuma,indimi, guwon, muritala, shagari, bayero, otedola, alakija, ameachi etc I laugh. That is the highest deceit I av heard And u think u will florish. It's not possible. God does not sleep nor slumber. He is aware of the happenings of this country.
So my brothers and sisters there is little or nothing u can do about it. It's beyond ur power and APC. It's only God that can salvage d situation.
Don't be surprise of another upsurge of prices of commodities soon again.
I know people are already feeling d hardship. But read Judges in d bible. And u will understand wat is going on in Nigeria.

See dem

Wetin be plummenting

Hmm..

It is well with us in this country.
I strongly believe that things will improve for the better, though it seems impossible at the moment.
Gold, before it comes out shiny has passed a lot of fire tests.
Nigeria will bounce back better and stronger!

Pavarottii:
Welcome to change.

love ur post

bondingman:
is it that buhari is synonymous to bad luck?

Gbam!!!

You just nailed it! More like saying Buhari is the antonym for "Goodluck"

With lokachi

We will still kip hope alive

Haaaaa...!! I nkan mbẹ
In Late Kola Olawuyi voice

Look at the bright side, people!

Personally, I have never stopped praying and hoping for the day that oil price and it's derivatives will hit rock bottom. The oil boom turned us into brainless assholes. We found a source of ready made cash, and our leaders stopped using their brains.

It's as simple as this: In the face of dwindling oil revenues, politicians will think deep before coming out to contest for, or seek appointments into offices. The awoof is no longer coming, so they have to work hard to scratch out every single penny from their states/ministries/constituencies.
When oil money is no longer available for sharing, we can now assess how intelligent or ingenious these crooks who have rode roughshod over the rest of us are.

Let's see those who can adapt and thrive in this shoddy country. It's the reason why regionalism was advocated. Lack of ideas has made Bubu say that the last national conference was a waste of time and money....just because regionalism was pointed as a way forward.
This is just the beginning. Only tough people last and come out stronger.

Summa

bondingman:
is it that buhari is synonymous to bad luck?

Abi oooo....before we didn't hear of Tomatoes ebola. The Government was more proactive to shield us from these abnormalities.

Nigerian government is a useless as "p" in psychology.


1. Why would the price drop down to 50% and u still make profits? This is because the cost of the essential raw material which is crude dropped drastically. This is understandable and it is the right thing to do.


2. What I don't understand is why Nigerian government has kept on buying other petroleum products (AGO,PMS and kerosene) @ the same price they used to buy it when the prices of the raw material (crude) was above $100/barrel, now that it has dropped to $50/barrel?

If u apply the logic in my question 1 above on question 2, u all will agree with me that the prices of all petroleum products should automatically drop by @least 50%.the very same way the prices of LNG dropped by 50%. After all, na the same raw material dem d use produce both commodities.


So, why is naija still buying @ inflated prices? Or can't they negotiate? Abi dem no mind weda it's citizens are suffering or not?

They will keep quiet and allow them to be exploited.
I pray for my country naija.

koxi:
It is well with us in this country.
I strongly believe that things will improve for the better, though it seems impossible at the moment.
Gold, before it comes out shiny has passed a lot of fire tests.
Nigeria will bounce back better and stronger!

how exactly will this happen? This is no fairytale movie were the characters finally live happily ever after

Presidiot mumumad buhari with his1983 bad luck is at it again

koxi:
It is well with us in this country.
I strongly believe that things will improve for the better, though it seems impossible at the moment.
Gold, before it comes out shiny has passed a lot of fire tests.
Nigeria will bounce back better and stronger!

story

No future for Nigeria with the type of youths we see on forum.

Youths who believe Buhari has a thing to do with oil and gas price crash worldwide. A crash that started long before Buhari became president. A crash that has global effects.

I weep for them really because their problem is beyond ordinary.

somehowpenis:
how exactly will this happen? This is no fairytale movie were the characters finally live happily ever after

lol...I understand ur point perfectly. Take a cue from all great nations of the world today. Which of them achieved greatness without suffering?

Nothing but senseless posts up there.

Bunch of kids roaming around on nairaland.

sai change, sai Baba

Sai pmb

Good morning Nigerians!

nbright:
story

This is reality staring at us in the face.